Digital Imaging Firm Battles Industry Giants.

Photobit Corp., leveraging patents it has licensed from NASA's Jet Propulsion Laboratory, is booming.

And with a fresh round of financing led by Hitachi Ltd. and Intel Corp., the Pasadena-based company is gearing up to battle industry giants in the fast-growing digital imaging market.

The company supplies complementary metal-oxide semiconductor (CMOS) image sensors -- camera systems on a chip that can snap 500 filmless pictures per second. The sensors are used in the PC video camera market, in dental technology and in the automotive industry.

Sabrina Kemeny, chairman and chief executive of Pasadena-based Photobit, said the $25.6 million capital infusion at the end of February would allow the company to continue battling competitor Omni Vision Technologies Inc., as well as industry giants Sony Corp., Sharp Corp. and Matsushita Electronic Industrial Co. Ltd., which have all invested heavily in a competitive technology.

Kemeny, a scientist at JPL in the early 1990s, founded the company in 1995 with fellow NASA scientist Eric Fossum. Photobit, with 120 employees, had revenues of $20 million last year, up from $4 million in 1999.

"This funding will help ensure that we have the resources necessary to bring to market our next generation of image sensor products aimed at high-volume applications and opportunities, ranging from digital still cameras to video cell phones," she said.

The competition in the market is fierce. CMOS technology is in a scrape with the more widely used image-capturing technology known as CCD, or change-coupled devices. Kemeny claims that CMOS can capture images in higher-speed situations and in situations where miniaturization is critical.

Goliath competitors

Brian O'Rourke, senior analyst with Cahners InStat Group in Scottsdale, Ariz., said that Japanese CCD makers Sony, Sharp and Matsushita have also begun to manufacture and market the new chips.

"There are 28 companies producing CMOS technology, which is too many," he said. "There will be a shakeout in the market and the larger companies that have a lot of experience will survive."

As for Photobit, O'Rourke said, "the company has such a depth of design talent that they will be a player in the market."

But even with its backing from Intel and Hitachi, he said, "it's going to be David vs. Goliath."

With their smaller size and greater power, CMOS sensors are expected to be at the forefront of innovation in the production of video recorders and digital cameras.

"CMOS image sensors are enabling new classes of portable and handheld products, which incorporate image-capture and video fractions," Kemeny said. "In addition, we look forward to a closer working relationship with Intel in order to gain insight into the imaging needs of the PC applications market."

Deanna Wong, an Intel spokeswoman, agreed, saying, "They produce a critical component in several of our products. We also see this as an opportunity to work with Photobit on product development."

Kemeny said that, in addition to its many applications, CMOS technology uses about 100 times less power than its CCD counterparts, an advantage in battery-dependent portable applications such as laptop computers, hand-held scanners and video cell phones.

Another key for Kemeny and Photobit in the battle with the CCD manufacturers is that CMOS chips are manufactured with standard semiconductor technology, which is cheaper than the specific technology used for CCDs.

The wholesale price of CMOS chips can range from about $100 to $2,500 each, said Diane Friedman, a Photobit spokeswoman. Development is complete in 12 to 13 production steps, compared to twice as many to produce CCD technology.

"With fewer steps, the (CMOS) manufacturing process is easier and less costly," said Bob Stroh, vice president of strategic marketing and business development at OmniVision. "So you have the entire semiconductor industry working on improving CMOS technology and looking to reduce their costs even further."

Michele Healey, an OmniVision spokeswoman, said that one of the company's applications was the use of CMOS technology for Fox Sports' telecast last June of the NFL Europe championship game.

The "Helmet-Cam" consisted of a silicon chip video camera the size of a thick postage stamp, attached to a camera the size of a shirt button. The button-sized camera was mounted in the center of the helmet, just over the top of the facemask.

Two thin wires connect the camera to the transmitter, which is mounted inside the helmet padding. The entire system weighs about three ounces, is powered by a small battery pack located within the helmet padding and delivers broadcast-quality images.

The earlier helmet-cam system used a lipstick-sized camera covered with padding mounted inside the helmet next to a player's cheek. The transmitter and battery were housed in a molded plastic encasement the size of a wide videocassette case mounted on the rear of the shoulder pads. The old system was wired together with a series of thick cables.